Benefits of Encouraging Employees to Use Vacation Time

Last updated: Jan 17, 2023

Vacations are the stuff of novels, movies, and memories. Research on the benefits of encouraging employees to use vacation time shows they’re also a source of improved productivity and profit for businesses and better mental, physical, and financial health for employees. And all that is adrenaline for the economy.


The Numbers Show Americans Need a (Vacation) Break

The U.S. Travel Association says American workers failed to use 768 million vacation days in 2018, with 55 percent of workers queried saying they didn’t use all their time. That was a record. More than 80 percent of those workers also said it’s important to use vacation time to travel, but they didn’t do it, citing costs, air travel difficulties, and problems getting away from work.


Here are some relevant data points:

  • The U.S. Bureau of Labor Statistics says the average number of paid vacation days in 2017 for private sector employees was 10 days after one year, 15 days after five years, 17 days after 10 years, and 20 days after 20 years.
  • USA Today reported in 2018 that the U.S. is the only advanced economy in which workers aren’t guaranteed paid vacation time.
  • USA Today also says “28 million Americans don’t get any paid vacation or paid holidays.”
  • The Pew Research Center says that as of 2020, in the throes of the COVID-19 pandemic, 24 percent of civilian workers (33.6 million) had no paid sick leave.



Lost Leisure Time Is Costly

Aside from getting another Busch Gardens or Disney World sticker for the bumper of your car, what are the reasons to use that vacation time? According to and Business Insider, failure to use your paid downtime can lead to:

  • Job burnout and decreased efficiency/productivity at work
  • Negative attitude at work that can adversely affect professional relationships and communication
  • Dissatisfaction with work that affects relationships off the job
  • Deterioration of mental health that can produce physical problems
  • A 33 percent greater risk of stroke and 13 percent greater risk of a heart attack for people working more than 55 hours a week, compared with people working 35 to 40 hours a week
  • Difficulty relaxing that results from an inability to escape external stress factors


You can argue that vacations are costly, too, and that’s true if you travel or do some high-dollar partying. But not taking vacation time can be costly, too. says “Americans forfeited 212 million paid time off days (in 2017), equivalent to $62.2 billion in lost benefits. In essence, Bankrate says:

  • Each person who didn’t use employee vacation time “donated an average of $561 in work time to their employer in 2017.”
  • Fatigued workers cost employers billions annually in lost productivity.



Employee Vacation Time Benefits Employers, the Economy, and Workers

It’s not that Americans don’t get vacation time or paid holidays. The average person with less than five years on the job gets two weeks of paid vacation and eight paid holidays annually. It’s just, they say, that:

  • Work will pile up.
  • They’ll be seen as replaceable.
  • Vacationing indicates a lack of dedication.
  • The company frowns on it.
  • The company allows them to roll over unused vacation, pays extra for working on holidays, or pays for unused vacation time.


Many of those who do take vacation find themselves unable to disconnect, continually answering or making business phone calls or exchanging emails. Not a good idea, says, which cited those six scenarios.


How Paid Vacations Benefits the Economy and Employers

Some employers think losing an employee to vacation time simply means paying two people to do one job – or leaving the work undone. That’s the short view. The long view is that what benefits employees also helps employers and thereby fuels the economy. Here’s more of the long view:

  • says the 212 million paid time off days workers didn’t use in 2017 “cost the economy $255 billion in missed opportunity and could have generated 1.9 million jobs.”
  • Work still has to be done when a worker is on vacation. Having someone else do the vacationing employee’s duties is a good way to gauge the efficiency of the missing worker.
  • Having employees fill in for vacationers is an effective way to cross-train staff.
  • Vacation reduces unscheduled absences caused by physical or mental issues related to stress or fatigue.
  • Paid time off is a perk that improves employee retention, hiring, and, morale.
  • A well-rested workforce sets the stage for productivity.
  • Rolling over vacation days is a financial liability, and a no-rollover policy can hurt morale and employee retention. The U.S. Travel Association cites a rollover from 2014 to 2015 of unused vacation time valued at $66 billion.
  • Paid time off enhances diversity because it allows people to celebrate cultural holidays not typically recognized by private employers in the United States.


How Paid Vacations Benefit the Worker

So, as established in detailing benefits accrued by employers and the economy when workers use their paid vacation time, the economy-employer-employee relationship is symbiotic. The entities interact for mutual benefit – in the best-case scenario.


All three have a dollar-driven bottom-line interest. The employee, though, has a physical stake in the game, too, and paid vacation protects that stake, preserving/enhancing physical and mental well-being.


Paid vacation, holidays, and sick leave are an investment in that employee’s well-being, and that investment is made because it benefits the company, too. And as former top General Electric executive Charles E. Wilson famously was misquoted as saying when being vetted by the Senate in 1953 to be President Dwight Eisenhower’s secretary of defense, “What’s good for General Electric is good for the country.”


Wilson was responding to a question in a Senate hearing about $2.5 million in G.E. stock he held. The issue was whether “he could make a decision adverse to the interests of General Motors” (and his stock). What he actually said was yes, he could. He added that he found that scenario inconceivable, “because for years I thought what was good for the country was good for General Motors and vice versa.”


Here’s the formula on calculating the benefits of taking a vacation: Well-rested and satisfied employee plus a company well-served by that employee equals a step toward creating or sustaining a strong U.S. economy.


USF Is a Good Business Partner, Too

Turn to us if you’re looking to enhance the employee-company partnership that makes your business thrive. The USF Office of Corporate Training and Professional Education offers:

  • On-site corporate training programs tailored to the needs of each business it serves.
  • Community outreach that provides learning opportunities for children and adults.
  • Additional programs ranging from Business and Technology to Human Resources, Process Improvement, Project Management, and much more.


For more information, check us out online, where you can find our contact information.